Hamilton v. Smith

• Decision Date: 29 June 1888
• Citation: 17 N.E. 740,110 N.Y. 159
• Parties: HAMILTON v. SMITH.
• Court: New York Court of Appeals Court of Appeals

110 N.Y. 159

17 N.E. 740

HAMILTON

v.SMITH.

Court of Appeals of New York.

June 29, 1888.

Appeal from general term, supreme court, Fifth department.

Prior to the year 1878, the city of Rochester constructed a system of waterworks by which it used certain water privileges which were appurtenant to the lands of one Hiram Smith. In that year, he with other owners of premises similarly affected, commenced an action to restrain the city. He was unsuccessful until, by the judgment of this court, his right to maintain the action was established. 92 N. Y. 463. After the reversal by this court of the judgments below, an order of injunction was granted. Hiram Smith died May 14, 1883, leaving a will, dated April 10, 1883, by which he disposed of his real and personal estate as follows, viz.: ‘ First. After all my lawful and just debts are paid and discharged, I give and bequeath unto my wife, Emily C. Smith, one equal one-third of all the personal property of which I may die seized, and the use or income from one-third of my real estate, during the term of her natural life. Second. The residue or remainder of my real and personal estate, of every name or nature, I give, devise, and bequeth unto my son, George R. Smith, in manner following: One equal one-half of the same to him absolutely; the other equal one-half to him in trust for the benefit and maintenance of my daughter, Emma C. Smith.’ Testator empowered his son to manage Emma's share, and to pay over to her the income, and also such part of the principal as he might choose; and he might transfer to her the title to the property held by him as trustee, and, upon properly accounting, thus release himself from the trust. Power was given to him, as executor or trustee, to sell, etc., any of testator's property, and to invest the same according to his discretion; and the right was given also to continue the business in which testator was engaged at the time of his death, in testator's name or otherwise, for such time as he might choose. George qualified as executor. At the time of his death, testator was engaged in the milling business. In November following testator's death, for considerations expressed in the conveyance, the widow and daughter of deceased conveyed to George the flouringmill premises, water privileges and rights now in question, the machinery, stock in trade, and indebtedness due the estate; he assuming payment of all incumbrances and indebtedness. In March, 1884, the city of Rochester instituted these proceedings to acquire, as against the owners of the mill property in question, and of other owners of mill privileges, the permanent and perpetual right to draw water, and to condemn the privileges injured thereby, and to ascertain by commissioners the amount of the compensation to be made to such owners. In June, 1885, the commissioners awarded to George and Emma Smith, as owners, the sum of $21,000. George, being indebted to William Hamilton, appellant herein, had assigned to him, in March, 1884, all his interest in the award as security for what was owing then, and for what he might thereafter become indebted to him for. Hamilton's claim amounted, at the time of these proceedings, to some $14,000. In December, 1884, George made a general assignment to said Hamilton for the benefit of his creditors. When the award of damages was made, the conflicting claims to the fund were referred for determination. They were made by Hamilton, by creditors of the decedent, Hiram Smith, and by George, as executor of his father's will. He filed his first account, as such executor, in September, 1886, which, at the time of these proceedings, had not been judicially settled, from which it appeared that there were presented debts against the estate, in addition to claims allowed and paid in full, amounting to about $25,000, of which about $23,000 remain unpaid and unsecured. The referee sustained the claim of Hamilton to the fund in virtue of the assignment to him individually and of the other assignment to him for the benefit of George's creditors; holding that the real estate was not devised charged with the payment of testator's debts. At special term, however, his report in that respect was modified, and payment ordered to be made to George, as executor, for distribution among the creditors of the estate. This disposition of the fund by the special term was sustained by the general term, and from the order of the general term Hamilton has appealed to this court.

Theo. Bacon, for appellant.

J. A. Stull, for respondent.

GRAY, J., ( after stating the facts as above.)

Section 2749 of the Code of Civil Procedure provides that ‘real property of which a decedent died seized * * * may be disposed of, for the payment of his debts and funeral expenses, as prescribed in this title, except where it is devised expressly charged with the payment of debts and funeral expenses,’ etc. Section 2750 provides that such a disposition may be effected by a proceeding before the surrogate's court, instituted, by unsecured creditors, ‘at any time within three years after letters were first duly granted, within the state, upon the estate of a decedent.’ By the force of these enactments the debts of a decedent, by the rights of creditors, will seek the real estate when the personalty is exhausted, and the only restriction upon their rights is the not unreasonable one of the period of time within which they shall be enforced. As the three years had more than elapsed in this case, the statutory remedy of the creditors of Hiram Smith against the real estate is no longer available. The question of the proper disposition of the fund in question is, therefore, of considerable moment to the parties interested in his estate. The water privileges which the city of Rochester, through its proceedings, condemned, were appurtenant to the real estate devised by the testator. They constituted an easement attaching to the land of the devisee, which would pass as an incident to it. This fund, therefore, partakes of the nature of realty, and for every purpose is to be treated as its representative here.

The general term, in their conclusions below, seemed influenced, in construing the terms of the will, by extrinsic circumstances; which, when called in aid of the discovery of the intention of the testator, led them to find an intention to charge his lands with the payment of his debts. They concede that the power of sale is not in terms significant in that direction; but they thought the words, ‘after all my just and lawful debts are paid and discharged,’ in the will, had such significance, in connection...